Economic recessions are weaker, expansions are stronger, and economic recovery is faster in U.S. states where people are more optimistic says a new study from the School of Business Administration. Further, the effects are stronger in states where people are older, less educated and less socially connected.

"Previous studies have shown that economic conditions affect mood -- people would expect this, it's more obvious," said Alok Kumar, the Gabelli Asset Management Professor of Finance at the University of Miami School of Business and one of the study's researchers. "Our study is unique in that it shows, for the first time, that mood and optimism can directly affect overall economic activity."